Utility CEO leaves amid studies about privatization.
JEA Chief Executive Officer and Managing Director Paul McElroy announced Friday he would not accept a new contract from the utility’s board of directions and would step down when his current employment agreement expires Sept. 30.
His resignation ends a 16-year career at the city’s largest independent authority that included six years as CFO. McElroy was promoted to the chief executive positon in 2012 after serving as CFO.
McElroy’s decision came during a special meeting Friday of the JEA board on “compensation committee matters.”
McElroy was not available Friday for comment and did not speak with media after the meeting.
Contract discussions by the compensation committee are typically the first step for executives and their contracts.
In a phone interview after the meeting, JEA Board Chair Alan Howard called McElroy “an outstanding leader and CEO of JEA, who has seen it through some very challenging times.”
“He’s a person of great integrity, of great humility and dignity,” Howard said. “I learned a lot from him.”
Howard said he and board members did not ask McElroy to step down.
He said he “sincerely and deeply regrets accepting his notice.”
McElroy will step away immediately from day-to-day operations.
Howard named Chief Financial Officer Melissa Dykes as interim CEO. She is the first woman tapped to lead the utility since its creation in 1895.
Dykes joined JEA after serving as a vice president at JPMorgan Chase.
Howard said Dykes is qualified to fill the CEO position in the interim because of her role as CFO.
“She’s been at the table for all strategic discussions and all significant operational discussions,” he said. “Second only to Paul McElroy, she has the greatest institutional knowledge across the utility.”
Friday was the first time the JEA board presided over McElroy’s expiring contract since early 2017.
The compensation committee’s previously scheduled meeting Feb. 13 was canceled as the utility prepared to host a joint meeting with City Council the next day to present a financial report on JEA’s potential market value to private buyers.
Howard said then there was too much distraction to hold the subcommittee meeting.
At the March 20 meeting, board member Husein Cumber suggested McElroy deserved clarity on the status of a three-year contract extension with a $520,392 annual salary. The contract would have included 3 percent annual raises through 2021.
McElroy leaves as the discussion about privatizing the utility is dominating City Hall, specifically through a special council committee at which McElroy has appeared three times to answer questions.
“I understand why he may want to go out on top, particularly given the uncertainty surrounding JEA’s future in the context of the current discussions,” Howard said.
Along with council, the Jacksonville Civic Council is reviewing the aspects of selling the utility.
At his most recent council committee appearance Thursday, McElroy discussed details of the utility’s 20-year power purchase agreement tied to the Plant Vogtle expansion in southeastern Georgia.
Howard said privatization talk presents a challenge when recruiting his successor.
“It will be difficult to attract top-notch talent if there’s a fear that it’s a short-term hire,” he said.
Howard said that compounds the challenges faced by municipal utilities when competing with private companies that can offer stock options or large severance packages to candidates.
He said he did not want to comment on possible replacements before the next JEA board meeting, scheduled April 17.
“JEA will certainly survive this and move on to the next stage,” said Howard.
In a statement released by Chief of Staff Brian Hughes, Mayor Lenny Curry said he appreciated McElroy’s years of service and dedication to the citizens of Jacksonville.
“As Mr. McElroy opts to step down, we have full confidence that the board will select an executive to move this asset forward,” said Curry.
McElroy was hired as CEO following the brief tenure of Joseph Belechak. Before serving as CFO, McElroy was JEA’s vice president of financial services.
He came to JEA after serving as vice president and general manager for Bombardier Capital Corp. in Jacksonville and Colchester, Vermont.
Before that, he served in management positions with Pitney Bowes Credit Corp.in Norwalk, Connecticut.